New review shows oil and gas debt at lowest levels since late 2014

A new review by the Department of Energy shows that debt levels in the energy industry are at their lowest levels since the third quarter of 2014.

Photo: Eric Gay /Associated Press

A new review by the Department of Energy shows that debt levels in the energy industry are at their lowest levels since the third quarter of 2014.

The financial review of the global oil and gas industry for the second quarter of 2018 ending June 30 found that companies had reduced their debt for seven consecutive quarters, leading to the lowest long-term debt-to-equity ration since the third quarter of 2014, which was right before oil prices began to plummet.

Debt was reduced by more than $20 billion in the second quarter, while the long-term debt-to-equity ratio was 41 percent, according to data from the Energy Department.

The Energy Department report reviewed 107 oil and gas companies of which 76 were U.S.-based, 13 in Canada, nine in Europe and another nine in other areas. More than half had production of less than 100,000 barrels of petroleum liquids a day. Among the companies included are Apache Corp., Devon Energy, ExxonMobil, and Royal Dutch Shell.

The report said Brent crude oil prices, the global benchmark, were 48 percent higher in second quarter 2018 than a year ago, averaging $75 a barrel, and the highest since the fourth quarter of 2014.

Rye Druzin is a business reporter who has reported in Texas since he moved to Midland in August 2014. He covers CPS Energy, refiners, manufacturing and oil and gas for the business desk. A native Californian, Rye earned his bachelors of arts in International Affairs from Lewis & Clark College in 2013.